UPDATE April 28, 2015, with Q1 earnings results.
CryoLife Inc. (NYSE:CRY) said yesterday that the FDA closed out a warning letter from 2013 about problems at a plant in Kennesaw, Ga., after follow-up inspections last month found the issues corrected and no further violations.
The FDA’s website lists the close-out date as April 23 for the January 29, 2013, warning letter.
"Resolving the FDA warning letter was my top priority when I joined the company. I am pleased that we passed the recent FDA re-inspection with no 483 observations and that the FDA has lifted our warning letter. The CryoLife team did a great job responding to the FDA’s concerns, and we are committed to the continued enhancement of our quality systems and delivery of the highest quality products to patients," chairman, president & CEO Pat Mackin said in prepared remarks.
Atlanta-based CryoLife also said it launched a clinical trial of its PerClot surgical hemostasis powder, enrolling the 1st patient under an investigational device exemption from the FDA, and reported its 1st-quarter results.
The 324-patient PerClot IDE study is a multicenter, multidisciplinary, controlled clinical investigation designed to compare the safety and efficacy of PerClot with C.R. Bard‘s (NYSE:BCR) Arista MPH hemostat "in multiple surgical disciplines when used as an adjunct to conventional means of achieving hemostasis such as pressure or ligature," CryoLife said.
The primary efficacy endpoint is achievement of hemostasis at the site of application at 7 minutes following application, with a secondary efficacy endpoint of hemostasis at the site of application at 5 minutes. Safety endpoints include the incidence of reoperation due to bleeding, total hospitalization and procedure time and the incidence of procedure complications and/or adverse events at 3 months, the company said.
"The first patient enrolled in the PerClot IDE clinical trial is a positive milestone for the company and our strategy to expand indications for our products," Mackin said in a prepared statement. "We will be working to bring other trial sites online in the coming months, positioning us to complete enrollment in the trial in the 1st half of 2016. With a 3-month follow-up period, we would anticipate obtaining FDA approval for PerClot in the 2nd half of 2017."
CryoLife and Bard are locked in a battle over the topical version of PerClot and the Arista product. Bard last month won a preliminary injunction barring U.S. sales of PerClot Topical in a patent infringement battle over the hemostatic agents.
Q1 sales, earnings off, but earnings outlook raised
CryoLife posted a swing to 1st-quarter losses and missed top-line expectations with a -5.3% sales slide during the 3 months ended March 31. The company reported losses of -$274,000, or -1¢ per share, on sales of $33.8 million, compared with Q1 2014 profits of $1.1 million. Analysts on Wall Street were looking for break-even on sales of $36.6 million.
The company said it now expects to break even this year, compared with prior guidance of -3¢ to 0¢, but cut its top-line forecast to sales growth of 3% to 4%, or $148.5 million to $150.5 million. That’s down from growth of 4% to 6%, or $151.0 million to $153.0 million.
The raised earnings outlook and FDA news buoyed CRY shares, lifting them 3.8% to $10.37 apiece today in early-afternoon activity.
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